Automation in cross-border fund orders above 75%

By: James Norris | 09 Dec 2011

Fund orders received by transfer agents in Luxembourg and Ireland reached 75% in the first half of 2011, says a report published by European Fund and Asset Management Association in association with SWIFT.

The report confirms that the automation and standardisation rates of orders of cross-border funds in Ireland and Luxembourg continues to grow.

The ISO messaging standard continues to strengthen: 37.3% in Q2 2011 compared to 35.4% in 2010, to the detriment mainly of proprietary file transfers. Luxembourg is paving the way with over 50% ISO standardization. Ireland has witnessed its strongest growth yet of +3%.

Regional rates, based on contributions representing 67% and 75% of the order volumes in Luxembourg and Ireland respectively, show that the automation rate of orders originating from the Asia-Pacific region continued to be relatively low in Q2 2011 compared to other regions: 44.4% in Luxembourg and 48.3% in Ireland against 2010 where they stood at 44.6% in Luxembourg and 39.6% in Ireland.

The combined regional ISO standardisation rates continue to be much higher with EMEA-based order givers; the rate shows 34% for Q2 2011, compared to 32.1% in 2010.

The total number of orders processed by the 31 TAs in the first half of 2011 was 13.2 million. This represents an average 2.2 million monthly volume of orders, up by 16% compared to the first half of 2010.

Peter De Proft, director general EFAMA, said: “Our latest survey confirms that the automation rate of cross-border fund orders remained above 75% during the first half of this year. The goal for 2012 should be to move closer to the 80% threshold, and concurrently with a rising ISO standardisation rate. Strengthening efficiency in fund back-office activities remains one of the best ways of controlling operational risks and enhancing the competitiveness of our industry.”

Marco Attilio, head of funds at SWIFT, adds: “We are pleased with the progress of ISO adoption across Luxembourg and Ireland transfer agents. It is clear there is a demand for standardisation in the market, which we are happy to support. This is particularly true with recent volatile market conditions that put a strain on funds operations and bring more risks and costs to the industry. Industry players can leverage automation and ISO standards to shield themselves from operational consequences and focus on their core value proposition.”